Bankinter: Key figures compared with consensus estimates: EBITDA ex asset sales €4,140m (+1.9%) vs. est. €4,073m. Total EBITDA €5,857M (+44%); EBITDA ex asset sales €1,595M (+7.3%) vs. €1,532M est; total EBITDA €2,760M (+86%); Funds From Operations (FFO) €3,145M (+5.9%); Net Debt €44,998M vs. €47,832M in December 2023. Results include capital gains from the sale of assets in Mexico (€1,717m in EBITDA and €1,165m in NAB).
Opinion of Bankinter’s analysis team:
Results above consensus (EBITDA excluding sale of assets in Mexico +7% vs +3% estimated). The management team slightly revises the guidance for the end of the year. Now expects high single-digit growth vs. +5% to +7% pre.
Positive factors in 1Q 2024: (i) Growth in the regulated asset base in networks and tariff revisions (ii) Improved commercialisation margin and (iii) New capacity in renewables.
On the negative side: (i) Lower gas management results; (ii) Absence of non-recurrent positive factors included in 1Q 2023 (recovery of the tariff deficit in the UK, compensation of storm costs in the US, high financial revenues from derivatives…).
Results may improve over the course of the year as the positive factors of Q1 2023 fade and the group’s new investments in 2024 gradually make a positive contribution to earnings. For this reason, the management team has revised its full-year guidance upwards.
We maintain our Buy recommendation. Reasons: (i) Clear winner in the process of further electrification and rapid decarbonisation facing the new energy model. Its positioning in renewables and grids, geographic diversification and solid financial structure allow it to capture opportunities; (ii) Shift towards a business profile with more visibility and less volatility.
On the one hand, most future investments are directed towards the network business, which is subject to predictable regulatory frameworks. On the other hand, in the generation business, it is increasing long-term contracts (PPAs) so as not to depend on market volatility; (iii) Growth. The 2026 Strategic Plan envisages medium/high single digit growth in the period 2023-2026 and (iv) Attractive valuation ratios: 2024 P/E ratio of 14.3x and 5.0% dividend yield.
